Monday, January 23, 2012

They Did What!?

RIM (Research in Motion) is the maker of the highly successful Blackberry smart phone. The past couple of years, however, have been turbulent for the company and that all came to a head on Sunday when the Co-Chairmen & CEOs, Jim Balsillie and Mike Lazaridis, resigned. Starting Monday, January 23rd, COO, Thorsten Heins will take over the reins of the organization. 

While many speculate why the RIM fell behind in a market they once led, the fact is they continued promising investors that their next big breakthrough was just around the corner. Except, after weeks, months and years there were still no results. The hope is Thorsten will lead them back to the leading edge they once held.

It’s clear that RIM is walking the plank. Over the past couple of years, Apple and Google have been eating RIM’s lunch, and there has been much speculation about their being acquired by a competitor. Yet, the tech company continues to say ‘give us more time’. Thorsten may possess the leadership and marketing skills to move them to the next level. At the same time, he was part of a failing enterprise. The only thing RIM may have succeeded in doing is playing the shell game. Perhaps, once again, they are buying time.

RIM isn’t the only business having this problem. In the early 80s, Xerox was the inventor of the first mouse we use for computers. They also invented the first laptop and had a number of other R&D breakthroughs. Except, they were poor at commercializing their innovations. When Steve Jobs visited Xerox, he saw the many innovations and took them back to Apple. The rest is history.

Perhaps RIM’s precarious future is reminiscent of IBM in the late 80s. When IBM was in trouble, they brought in Lou Gerstner.  He was an outsider for the technology industry. He brought to the table leadership and a fresh perspective. RIM needs the same.

RIM has tough decisions to make. They are being rather nice to people who have caused the stock price to drop 75%. From my perspective, they are taking a huge risk by keeping Thorsten who was COO and keeping the Co-CEOs in the organization as Vice Chair and Director.

Right now RIM needs to bring in an entirely new leadership team and distance themselves from the Co-CEOs. If they still have value, they can be leveraged as consultants with no decision-making authority. 

Second they need to stop seeing RIM as a device company. They need to look at themselves as, let’s say, an entertainment company or an information network. That way they can create service offerings to differentiate themselves. Their devices become a way to get services to the public. If they view themselves from another perspective, it would completely change their marketing strategies. Additionally, they would have to build organizational structures like an entertainment or information network company.   

Such a move would take guts. It would require tough decisions and someone with a bold vision to execute it. They would also need to make a leap in how quickly they go to market. If they structure themselves as a different kind of industry, outsourcing may be a more cost efficient way to produce devices as well as intellectual property.

From the way it appears, the board seems to have great hope for Thorsten. However, everyone knows that hope is a poor strategy.

What do you think? 

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